2019 No. 1048
The Value Added Tax (Amendment) Regulations 2019
Made
Laid before the House of Commons
Coming into force
The Commissioners for Her Majesty’s Revenue and Customs make the following Regulations in exercise of the powers conferred by paragraph 2(10)(b) to (e) and (11) of Schedule 11 to the Value Added Tax Act 19941.
Citation, commencement and effect
1
These Regulations may be cited as the Value Added Tax (Amendment) Regulations 2019 and come into force on 1st September 2019.
2
1
The amendments made by these Regulations have effect in relation to supplies for which there is an increase or decrease in consideration that occurs on or after 1st September 2019.
2
For the purposes of this regulation, an increase or decrease in consideration—
a
means an increase or decrease in consideration as described in regulation 24A of the Value Added Tax Regulations 19952as inserted by regulation 6 of these Regulations, and
b
occurs at the time specified in regulation 24B of the Value Added Tax Regulations 1995 as inserted by regulation 6 of these Regulations.
Amendment of the Value Added Tax Regulations 1995
3
The Value Added Tax Regulations 1995 are amended as follows.
4
After regulation 15B insert—
Changes in consideration: debit notes and credit notes15C
1
This regulation applies to increases and decreases in consideration as described in regulation 24A.
2
Where there is an increase in consideration, the supplier must, no later than the end of the period of 14 days beginning with the day on which the increase occurs, provide to the recipient of the supply a debit note as specified in paragraph (3).
3
For the purposes of this regulation, a “debit note” is a document which includes the following particulars—
a
the identifying number of the document,
b
the date of issue of the document,
c
the name, address and registration number of the supplier,
d
the name and address of the recipient of the supply,
e
the identifying number and date of issue of the VAT invoice or invoices relating to the supply for which there is an increase in consideration,
f
a description sufficient to identify the goods or services supplied,
g
the amount of the increase in consideration excluding VAT,
h
the rate and the amount (expressed in sterling) of the VAT chargeable in respect of the increase in consideration.
4
The requirement in paragraph (2) to provide a debit note does not apply in cases where, in relation to the increase in consideration, a document having the same purpose as a debit note has been provided by the supplier to the recipient of the supply before 1st September 2019.
5
Where there is a decrease in consideration, the supplier must, no later than the end of the period of 14 days beginning with the day on which the decrease occurs, provide to the recipient of the supply a credit note as specified in paragraph (6).
6
For the purposes of this regulation, a “credit note” is a document which includes the following particulars—
a
the identifying number of the document,
b
the date of issue of the document,
c
the name, address and registration number of the supplier,
d
the name and address of the recipient of the supply,
e
the identifying number and date of issue of the VAT invoice or invoices relating to the supply for which there is a decrease in consideration,
f
a description sufficient to identify the goods or services supplied,
g
the amount of the decrease in consideration excluding VAT,
h
the rate and the amount (expressed in sterling) of the VAT credited in respect of the decrease in consideration.
7
The requirement in paragraph (5) to provide a credit note does not apply in cases where, in relation to the decrease in consideration, a document having the same purpose as a credit note has been provided by the supplier to the recipient of the supply before 1st September 2019.
8
In cases where a supplier was not required by these regulations to provide a VAT invoice in relation to the original supply, the requirement in paragraph (2) to provide a debit note and the requirement in paragraph (5) to provide a credit note do not apply unless the recipient of the supply is a taxable person and requests a debit note or a credit note (as the case may be) from the supplier.
9
Where a request described in paragraph (8) has been made—
a
the period specified in paragraph (2) or (5) (as the case may be) begins with the day on which the request is made; and
b
paragraph (3)(e) or (6)(e) (as the case may be) does not apply.
10
In relation to any increase or decrease in consideration for supplies to which regulation 16A applies, paragraph (3)(a), (d) and (e) or (6)(a), (d) and (e) (as the case may be) does not apply.
11
Where there is a decrease in consideration to which regulation 38ZA applies—
a
paragraphs (5) to (10) do not apply; and
b
if the final consumer requests an accounting document in relation to the decrease in consideration, the first supplier must, no later than the end of the period of 14 days beginning with the day on which the request is made, provide to the final consumer a document which includes the following particulars—
i
the date of issue of the document,
ii
the name, address and registration number of the person issuing the document,
iii
a description sufficient to identify the goods supplied,
iv
the amount of the decrease in consideration excluding VAT,
v
the rate and the amount (expressed in sterling) of the VAT credited in respect of the decrease in consideration.
12
Where the recipient of the supply or, in cases where it is applicable, the final consumer agrees, the documents described in paragraphs (3), (6) and (11)(b) may be provided in electronic format.
13
For the purposes of this regulation—
a
an increase or decrease in consideration occurs at the time specified in regulation 24B; and
b
“final consumer” and “first supplier” have the meanings given by regulation 38ZA(2).
14
The Commissioners may, in such cases as they think fit, dispense with or relax the requirements in this regulation in such manner as they think fit.
5
In regulation 24 omit the definition of “increase in consideration” and “decrease in consideration”.
6
After regulation 24 insert—
24A
For the purposes of this Part—
a
an increase in consideration is an increase in the consideration for a supply made by a taxable person in respect of which the recipient of the supply or another person acting on behalf of, or pursuant to an arrangement with, the recipient of the supply pays or becomes liable to pay the amount of the increase to the supplier;
b
a decrease in consideration is a decrease in the consideration for a supply made by a taxable person in respect of which the supplier pays the amount of the decrease to the recipient of the supply or to any other person entitled to receive the payment;
c
where there is a decrease in consideration in respect of which the supplier makes a part payment on account to the recipient of the supply (or to any other person entitled to receive the part payment)—
i
the decrease is to be treated as a decrease in consideration only to the extent covered by the part payment; and
ii
each part payment on account is to be treated as being made in relation to a separate decrease in consideration.
24B
For the purposes of this Part—
a
an increase in consideration occurs when it is agreed by the supplier and the recipient of the supply; and
b
a decrease in consideration occurs when the supplier pays the amount of the decrease to the recipient of the supply or to any other person who is entitled to receive the payment.
24C
1
For the purposes of regulations 24A and 24B, “payment”—
a
means a payment in money and “pay” and “pays” are to be construed accordingly; and
b
includes cases where a person—
i
sets off an amount against a corresponding monetary liability of another person; or
ii
makes a “relevant payment” as defined in regulation 38ZA(2).
2
For the purposes of applying regulation 38ZA, the reference in regulation 24A(b) and (c) and in regulation 24B(b) to—
a
“the supplier” includes a reference to the “first supplier” as defined in regulation 38ZA(2); and
b
“the recipient of the supply” includes a reference to the “final consumer” as defined in regulation 38ZA(2).
7
In regulation 31(1)—
a
at the end of sub-paragraph (h) omit “and”; and
b
for sub-paragraph (i) substitute—
i
all documents received in accordance with regulation 15C and copies of such documents provided in accordance with that regulation,
8
In regulation 38—
a
after paragraph (4) insert—
4A
In the case of an increase in consideration, no entry may be made under paragraph (4) unless the recipient of the supply holds the debit note which the supplier is required to provide under regulation 15C(2).
b
for paragraph (5) substitute—
5
Every entry required by this regulation must be made in that part of the VAT account which relates to the prescribed accounting period in which the increase in consideration or decrease in consideration occurs.
c
omit paragraph (6);
d
at the end of paragraph (7), after “regulations 34 and 35”, insert “except insofar as there is an error arising from a failure to make any entry required by this regulation”; and
e
after paragraph (7) insert—
8
Paragraphs (4A) and (5) do not apply in cases where an adjustment in relation to an increase or decrease in consideration has been made in accordance with this regulation before 1st September 2019.
9
In regulation 38A—
a
in paragraph (2)—
i
for “Paragraphs (5) and (6) of regulation 38 shall apply”, substitute “Paragraph (5) of regulation 38 applies”; and
ii
for “they apply” substitute “it applies”; and
b
at the end of paragraph (3), after “regulations 34 and 35”, insert “except insofar as there is an error arising from a failure to make any entry required by this regulation”.
(This note is not part of the Regulations)